Cisco Report Offers Insights on Growing Video Traffic and Mobile Speeds

Cisco's valuable Annual Internet Report projects significant growth in connected devices by 2023, and much of the growth in data traffic flowing to and from those devices will be video. As the Report observes: "Video devices, in particular, can have a multiplier effect on traffic." The report projects significant growth in smartphones as well as connected TVs such as flat-panel screens, smart Blu-ray players, gaming consoles, and other video devices. The report estimates that 66% of installed flat-panel TVs will be Ultra-High-Definition (UHD) or 4K, up from 33% in 2018. The bit rate for UHD video streaming is 15-18 Mbps, more than double the rate for HD.  

Importantly, Cisco's report projects growth in mobile connection speeds that will more than match that higher bit rate requirement for UHD video streaming on smartphones and other connected devices. According to the report, the average mobile download speed will increase from 13.8 Mbps in 2018 to 43.9 Mbps by 2023. Moreover, North America's average mobile connection speed is projected to climb to 58.4 Mbps by 2023, up from 21.6 Mbps in 2018. And average Wi-Fi speeds from mobile devices will reach 100 Mbps by 2023. 

Improving capacity for mobile viewing on enhanced 4G LTE networks and 5G networks will strengthen consumer perception of the substitutability of wireless for wireline services. Expect to hear more on this issue of substitution in a Free State Foundation paper later this spring. 

Cisco's Annual Internet Report: Future Trends in Regional Wi-Fi Speeds

As my Free State Foundation colleague Seth Cooper highlighted recently, Cisco has released the 2020 edition of its always-informative Annual Internet Report. I commend Cisco for making this invaluable industry resource available and anticipate seeing, as well as making, references to its findings during the year ahead.

The report, which covers 2018 through 2023, provides valuable insights into the current state of, and future trends regarding, fixed wireline, mobile, and Wi-Fi connectivity worldwide.

In particular, one specific set of data points caught my attention. Cisco forecasts that, at some point in 2022, average Wi-Fi network connection speeds in the Asian Pacific region will overtake those in the North American region: 98.5 Mbps versus 98.4 Mbps. And by 2023, Asian Pacific speeds will average 116.1 Mbps, compared to only 109.5 Mbps in North America.

Pending FCC proposals could free additional spectrum for unlicensed devices in two frequency bands, 5.9 GHz and 6 GHz. Both would enable the wider (e.g., 80 and, in particular, 160 MHz) data channels essential to unleashing the full potential of the next generation of Wi-Fi technology, Wi-Fi 6 (IEEE 802.11ax).

Time will tell whether one or both of these proceedings in fact produce additional spectrum for unlicensed use and, if so, whether North America can maintain its global leadership position in Wi-Fi speeds as a result.

Cisco Report Looks Ahead to 2023's Internet

On February 18, Cisco released its "Annual Internet Report," which includes a forecast of mobile, Wi-Fi and fixed broadband up through 2023. Among the Cisco report's interesting projections for North America in 2023: 

• 345 million Internet users (92% of regional population), up from 328 million (90%) in 2018. 
• 329 million mobile users (88%), up from 313 million (86%) in 2018. 
• 5.0 billion networked devices/connections, up from 3.0 billion in 2018. 
• 25% of all networked devices will be mobile-connected and 75% will be wired or connected over Wi-Fi. 
• Average fixed broadband speed will reach 141.8 Mbps, a 2.5-fold growth from 2018 (56.6 Mbps). 
• Average mobile connection speed will reach 58.4 Mbps, a 2.7-fold growth from 2018 (21.6 Mbps). 
• Average Wi-Fi speeds from mobile devices will reach 110 Mbps, a 2.3-fold growth from 2018 (46.9 Mbps).

Interesting data points and projections concerning video viewing, cybersecurity, and more are also contained in the latest installment of Cisco's report.

Video Data Is the Leading Contributor to Rapid Traffic Growth

On November 26, 2018, Cisco released its Visual Network Index (VNI): Forecast and Trends, 2017-2022. This annual report is useful to policymakers, entrepreneurs, and consumers because it projects growth of broadband devices and network technologies at the national, continental, and global level. Given the projections, the report should be particularly useful in getting policymakers to focus on the need to remove regulatory and other impediments to deploying broadband infrastructure. Cisco deserves credit for producing this valuable resource.

According to Cisco, the significant rise in Internet traffic experienced over the past decade or so is expected to continue for the next five years as connections increase and networks expand. The proliferation of video applications is by far the most significant driving force behind exponentially increasing Internet traffic. On a global level, video traffic comprised 75% of Internet data in 2017 and it will increase to 82% by 2022. In the United States, video traffic comprised 81% of all Internet traffic in 2017 and it will increase to 82% by 2022.

As the graph below shows, global Internet traffic will grow threefold from 2017 to 2022, at the same rate as Internet traffic growth in the United States.

Global Internet Traffic: Cisco Forecasts 396 Exabytes per Month by 2022

Overall, the amount of Internet traffic and the number of users and devices throughout the world is astounding. By 2022, there will be 4.8 billion Internet users (60% of the global population), up from 3.4 billion in 2017. And those users will connect to 28.5 billion networked devices, up from 18 billion in 2017. In the United States by 2022, there will be 317 million Internet users (94% of the population) connecting to 4.6 billion networked devices. That means there will be 13.6 networked devices per capita by 2022, up from 8.1 per capita in 2017.

The graph below shows the extraordinary global growth projected across all Internet-enabled devices.

Global Devices and Connections Growth, 2017 - 2022

While overall Internet traffic and devices are growing at a phenomenal rate, mobile traffic is growing twice as fast as fixed traffic. The United States has been a leader in the growth of mobile traffic, which is expected to increase fivefold from 2017 to 2022. Over that same span, global mobile traffic is expected to grow even faster than the U.S. mobile traffic.

Here are some key findings regarding the growth of mobile broadband throughout the world:

• Average smartphone usage will grow from 5.1 GB per month in 2017 to 26.1 GB per month in 2022.

• Global mobile traffic will increase sevenfold between 2017 and 2022.

• Global mobile traffic will grow nearly twice as fast as fixed Internet traffic from 2017 to 2022.

• Video will comprise 79% of global mobile traffic by 2022, compared to just 59% in 2017.

• Global mobile traffic by 2022 will be equivalent to 38x the volume of the entire global Internet in 2005.

Here are some of the key findings regarding the growth of mobile broadband in the United States:

• The average mobile connection speed will grow threefold from 2017 to 2022, reaching 39 Mbps.

• U.S. mobile traffic will reach 5.7 exabytes per month by 2022, up from 1.2 exabytes per month in 2017.

• U.S. mobile traffic will grow fivefold from 2017 to 2022, a compound annual growth rate of 36%.

• U.S. mobile traffic will grow two times faster than fixed IP traffic from 2017 to 2022.

• U.S. mobile traffic by 2022 will be equivalent to 12x the volume of the entire U.S. Internet in 2005.

The United States has been a global leader in mobile device innovation and the deployment of mobile broadband networks. Advanced 4G networks offer exponentially superior reliability, capacity, speeds, and security for mobile traffic compared to previous mobile network technologies. Now, we are on the cusp of deploying 5G mobile network technology, which will deliver speeds at least 10 times faster than 4G and enable “smart cities” to more efficiently use local services such as energy, utilities, transportation, and public safety. Deployment of 5G technology is expected to create 3 million jobs and $500 billion in annual economic activity.

Since my February 2017 blog regarding Cisco’s most recent mobile traffic update, the FCC has adopted a number of items that should spur innovation and investment in U.S. broadband networks, both mobile and fixed. Adoption of the Restoring Internet Freedom Order, proposed in May 2017, repealed the public utility-style regulations imposed in the Title II Order. Internet service providers increased broadband investment in 2017 after a two-year decline. Moreover, the FCC has adopted a number of wireless and wireline infrastructure items that remove state and local regulatory barriers. These should accelerate 5G wireless deployment. (See here and here.) Lastly, the Commission has identified a number of spectrum bands for commercial assignment and allocation, which will be tremendously valuable as consumers continue to demand more mobile data. (See here and here.)

Again, Cisco’s report is an important tool. It should help U.S. policymakers understand that mobile and fixed data services require additional spectrum to match the forecasted growth and to make the social and economic benefits of 5G a reality. To promote 5G and the emergence of other broadband technologies, policymakers at the federal, state, and local levels must avoid imposing unnecessary new regulatory burdens and continue to remove existing ones. Also, Congress and the FCC should continue to remove, or at least minimize, impediments to infrastructure investments in order to ensure continued innovation and growth in the dynamically competitive market for broadband services.

Ericsson ConsumerLab Report Projects Increase in Mobile Video

Today, Ericsson released its 2017 edition of the ConsumerLab TV and Media Report, showing significant growth in the proliferation of mobile video. Here are some of the key findings from the report:

• By 2020, 50% of all TV and video viewing will take place on a mobile screen (tablets, smartphones and laptops), an increase of 85% since 2010.

• In 2017, nearly 60% of viewers prefer on-demand viewing over scheduled linear TV viewing, an increase of around 50% since 2010. By 2020, linear and video on demand viewing will be almost equal.

• The average number of used on-demand services has increased from 1.6 in 2012 to 3.8 services in 2017 per person.

• By 2020, one in three consumers will be Virtual Reality users.

The significant increase in consumer demand for mobile video is the main reason that Cisco projected mobile data to increase fivefold from 2016 to 2021.  This explosion in demand combined with effective wireless competition produces enormous enhancements in consumer welfare.

U.S. Should Continue Leading in Promoting Global Broadband Access

Cisco recently released its Visual Networking Index: Forecast and Methodology, 2016-2021, not to be confused with Cisco’s mobile forecast, which I discussed in a February 2017 blog. This valuable index presents global and regional trends regarding Internet access, usage, and network speeds. The most interesting finding might be that 58% of the world’s population will be using the Internet by 2021.

As a global leader in broadband investment, innovation, access, and adoption, the United States should adopt policies that will promote growth in broadband deployment, access, and devices. Not only will this create jobs and economic activity within the United States, but it could encourage similar policies in other countries.

Another interesting finding in the new report is the proliferation of smartphone use. Consumers are beginning to use smartphones as their primary device. The report finds that global smartphone traffic will exceed personal computer (PC) traffic by 2021. In 2016, PCs accounted for 46% of total Internet traffic, but by 2021 PCs will account for only 25% of the total traffic. Smartphones will account for 33% of total Internet traffic in 2021, up from 13% in 2016.

Here are some more of the key findings regarding global Internet access, usage, and network speeds:

• By 2021, 58% of the population will be using the Internet, up from 44% in 2016.

• By 2021, 80% of all Internet traffic will be video, up from 67% in 2016.

• By 2021, there will be 3.5 networked devices and connections per person, up from 2.3 in 2016.

• By 2021, there will be 61 GB of Internet traffic per month, per user, up from 24 GB in 2016.

• By 2021, the average broadband speed will be 53 Mbps, up from 27.5 Mbps in 2016.

• By 2021, the average mobile speed will be 20 Mbps, up from 6.8 Mbps in 2016.

Here are some of the same key findings with respect to North America:

• By 2021, 89% of the population will be using the Internet, up from 88% in 2016.

• By 2021, 78% of all Internet traffic will be video, up from 74% in 2016.

• By 2021, there will be 12.9 networked devices and connections per person, up from 7.7 in 2016.

• By 2021, there will be 181 GB of Internet traffic per month, per user, up from 68 GB in 2016.

• By 2021, the average broadband speed will be 74.2 Mbps, up from 32.9 Mbps in 2016.

• By 2021, the average mobile speed will be 25 Mbps, up from 13.7 Mbps in 2016.

As you can see, North America is well ahead of the rest of the world in terms of Internet usage and network speeds, with the United States the leader of North America. Until February 2015, U.S. consumers benefited from a relatively light-touch regulatory regime that did not discourage investment and innovation. The regulatory uncertainty and burdensome costs imposed by the FCC’s 2015 Open Internet Order have slowed investment by about $5.6 billion. In order to continue a rapid increase in output of investment in broadband networks and devices, the FCC should reclassify broadband as a Title I “information service” and implement a light-touch regulatory framework that promotes competition and protects consumers from potential harms.

Moreover, as Free State Foundation Senior Fellow Ted Bolema and I suggested in a new Perspectives from FSF Scholars, there are steps that Congress, the FCC, and state and local governments should take to promote private broadband investment and increase access in underserved areas. So, although the United States, for now, is a world leader in broadband investment, innovation, access, and adoption, encouraging additional network investment and innovation within the U.S. could incentivize foreign governments to embrace similar policies.

By 2021, more than half of the world’s population will be using the Internet. If the U.S. adopts policies that promote broadband investment and access within the United States, the positive impact on job creation and economic activity may encourage foreign governments to adopt similar polices. In other words, the U.S. leadership through example could help increase global Internet access, pushing adoption well beyond 58% of the world’s population.

Again, Cisco’s index is valuable in providing policymakers with a forecast of the exponential Internet growth just over the horizon. 

Mobile Data Traffic Expected to Increase Exponentially by 2021

Cisco Forecasts Continued Extraordinary Mobile Traffic Growth

On February 7, 2017, Cisco released its annual Visual Network Index (VNI) Forecast Report: Mobile Data Traffic Update, 2016-2021. This annual report is useful in helping policymakers, entrepreneurs, and consumers understand the forecasted growth of mobile devices and network technologies at national, continental, and global levels. It should be particularly useful in getting policymakers to focus on the need to remove impediments to the deployment of next-generation 5G network infrastructure.

The significant rise in mobile traffic experienced over the past several years is expected to continue for the next five years, as connections increase and networks expand. The proliferation of video applications is by far the biggest driving force behind exponentially increasing mobile traffic. On a global level, video traffic is projected to comprise 78% of mobile data in 2021, an increase of 30% from 2016. The United States has been a leader in the growth of mobile connections and traffic, with mobile traffic expected to rise fivefold by 2021. And as the graph below indicates, global mobile data traffic will increase sevenfold by 2021.

Cisco Forecasts 49 Exabytes per Month of Mobile Data Traffic by 2021

Here are some key findings regarding the growth of mobile connections and traffic throughout the world:

• Almost half a billion (429 million) mobile devices and connections were added in 2016.

• Mobile network (cellular) connection speeds grew more than threefold in 2016.

• Average smartphone usage grew 38% in 2016 from 1,169 MB per month in 2015 to 1,614 MB per month in 2016.

• Global mobile data traffic will increase sevenfold between 2016 and 2021.

• By 2021, 4G will be 53% of connections, but 79% of total traffic.

• The average smartphone will generate 6.8 GB of traffic per month by 2021, a fourfold increase over the 2016 average of 1.6 GB per month.

The graph below shows the extraordinary global growth projected across all Internet-enabled devices.

Global Mobile Devices and Connections Growth

Here are some of the key findings for the United States:

• Mobile data traffic totaled 1.3 exabytes per month in 2016, the equivalent of 334 million DVDs each month or 3,687 million text messages each second.

• Mobile data traffic will grow fivefold from 2016 to 2021, a compound annual growth rate of 35%.

• Mobile data traffic will grow 2 times faster than fixed IP traffic from 2016 to 2021.

• Mobile traffic per user will reach 18,617 megabytes per month by 2021, up from 4,604 megabytes per month in 2016, a compound annual growth rate of 31%.

North America, predominantly the United States, has been a global leader in mobile device innovation and the deployment of mobile broadband networks. Advanced 4G networks offer exponentially superior reliability, capacity, speeds, and security for mobile data traffic compared to previous mobile network technologies. By 2021, 53% of all global devices and connections will have 4G capability. But 63% of devices and connections in North America will have 4G capability.

The United States’ strong protections for intellectual property (IP) rights have encouraged a proliferation of mobile device brands and new video content. Indeed, mobile video currently comprises 60% of mobile data in the United States. It is important for device manufacturers, app designers, content creators to have secure copyrights and patent rights in order to incentivize returns on creation and investment. The prospect of profitable returns sustains new product and service innovation, encourages investment by competitors, and invites new entrants into the market—ultimately leading to more choices and lower prices for consumers. As further explained in a new February 15 blog, Free State Foundation Senior Fellow Seth Cooper and I discussed the findings of the GIPC’s 2017 International IP Index and why the United States should take steps to expand its global leadership in IP rights protection.

The United States’ leadership in developing mobile broadband networks, devices, and content apps has also been facilitated by a predominantly light-touch regulatory environment. The Omnibus Budget Reconciliation Act of 1993 – and key FCC deregulatory decisions in the two-plus decades that followed – removed regulatory barriers to entry and avoided onerous rate controls. This light touch regulatory regime spurred entrepreneurial investment in new mobile services and products, facilitating the creation and widespread availability of mobile services in finance, health, and transportation. Indeed, we are now on the cusp of 5G mobile network technology, which will deliver speeds 10 times faster than 4G and enable “smart cities” to more efficiently use local services such as energy, utilities, transportation, and public safety. Future deployment of 5G technology is expected to create 3 million jobs and $500 billion in annual economic activity. 

Unfortunately, the previous light touch environment for mobile services became more intrusively regulated during FCC Chairman Tom Wheeler’s tenure. Ensuring that ongoing 4G deployments to all Americans take place in a timely manner and facilitating future 5G advancements requires that Congress or the FCC reverse the Open Internet Order’s imposition of public utility-style regulation on mobile broadband services. Congress or the FCC must also repeal the anti-innovation, unnecessarily prescriptive regulations adopted in the Broadband Privacy Order. The Federal Trade Commission should instead be empowered to protect privacy across all types of online services platforms according to a consumer welfare-oriented standard.

More licensed and unlicensed spectrum is needed to fully realize the tremendous economic potential of 5G technology. The proposed MOBILE NOW Act, if ultimately enacted in present or similar form, would make 500 MHz of spectrum available by 2021 and encourage the continued growth of innovative mobile services.

Cisco’s latest Mobile Data Traffic Update report should help U.S. policymakers appreciate that the extraordinary forecasted mobile data growth requires additional spectrum to match that growth and make its economic benefits a reality. To promote the next generation of mobile broadband, it is crucial that policymakers at the federal, state, and local levels avoid imposing new regulatory burdens and remove existing ones. Also, Congress and the FCC should remove or at least minimize impediments to wireless infrastructure investments in order to ensure continued innovation and growth in the indisputably competitive market for mobile services.

Online Video Is Driving Internet Traffic Growth

On June 6, 2016, Cisco released its annual Visual Network Index (VNI): Forecast and Methodology, 2015-2020. Consistent with Cisco’s latest Mobile Data Traffic Update, which I highlighted in a February 2016 blog, this new index projects the global growth of Internet traffic and devices on all broadband technologies as opposed to just mobile.

Here are some of the key findings:

• Global Internet traffic will increase nearly threefold over the next five years and will have increased nearly 100-fold from 2005 to 2020.

• Smartphone traffic will exceed PC traffic by 2020. In 2015, PCs accounted for 53 percent of total Internet traffic, but by 2020 PCs will account for only 29 percent of traffic. Smartphones will account for 30 percent of total Internet traffic in 2020, up from 8 percent in 2015.

• Traffic from wireless and mobile devices will comprise two-thirds of total Internet traffic by 2020.

• Global Internet traffic in 2020 will be equivalent to 95 times the volume of the entire global Internet in 2005.

• The number of devices connected to broadband networks will be three times as high as the global population in 2020. There will be 3.4 networked devices per capita by 2020, up from 2.2 networked devices per capita in 2015

The proliferation of video applications is by far the biggest driving force behind the increases in Internet traffic over the past several years and will continue to be for the next five years as connections increase and networks expand. On a global level, video traffic is projected to comprise 79 percent of Internet traffic in 2020. This is an increase of 16 percentage points from 2015 (63 percent).

While the United States certainly has been a leader in the amount of growth in connections and traffic, Cisco projects the rest of the world will have tremendous growth over the next five years. For the U.S. to continue to lead with respect to broadband deployment and innovation in broadband technologies, it is important that the FCC and state and local agencies remove unnecessary and burdensome regulatory barriers that stifle investment and innovation in broadband networks. Additionally, for continued growth in mobile broadband innovation, the FCC needs to allocate more licensed and unlicensed spectrum to meet the increasing consumer demand for advanced services and devices.

Cisco Projects Global Mobile Traffic to Increase 8-Fold by 2020

On February 3, 2016, Cisco released its annual Visual Network Index (VNI) Forecast Report: Mobile Data Traffic Update, 2015-2020. I certainly recommend exploring the global, regional, and national findings on Cisco’s helpful interactive website.

The proliferation of video applications are by far the biggest driving force behind the increases in mobile traffic over the past several years and will continue to be for the next five years as connections increase and networks expand. On a global level, video traffic is projected to comprise 75 percent of mobile data in 2020, an increase of 20 percentage points from 2015 (55 percent). While the United States certainly has been a leader in the growth of mobile connections and traffic, Cisco projects the rest of the world will have tremendous growth over the next five years.

Here are some key findings regarding the growth of mobile connections and traffic throughout the world:

• More than half a billion (563 million) mobile devices and connections were added in 2015.

• Mobile network (cellular) connection speeds grew 20 percent in 2015.

• Average smartphone usage grew 43 percent from 648 megabytes per month in 2014 to 929 megabytes per month in 2015.

• Global mobile data traffic will increase nearly 8-fold between 2015 and 2020.

• By 2020, 4G will be 40.5 percent of connections, but 72 percent of total traffic.

• The average smartphone will generate 4.4 gigabytes of traffic per month by 2020, a 5-fold increase over the 2015 average of 929 megabytes per month.

As you can see from the two graphs below, the global growth of both mobile traffic and the number of devices is projected to be enormous over the next five years.

Cisco Forecasts 30.6 Exabytes per Month of Mobile Data Traffic by 2020

Global Mobile Devices and Connections Growth

Here are some of the key findings for the United States:

• 43.3 million net new devices and connections were added to mobile networks in 2015.

• Mobile data traffic will grow 6-fold from 2015 to 2020, a compound annual growth rate of 42%.

• Mobile data traffic will grow 2 times faster than fixed IP traffic from 2015 to 2020.

• Mobile traffic per user will reach 8,835 megabytes per month by 2020, up from 1,775 megabytes per month in 2015, a compound annual growth rate of 37%.

• There will be 292.2 million (88% of the United States' population) mobile users by 2020, up from 275.7 million in 2015, a compound annual growth rate of 1.2%.

North America, and predominately the United States, has been a global leader in the innovation and development of mobile broadband networks. By 2020, 40.5 percent of all global devices and connections will have 4G capacity, but in North America, 59 percent of devices and connections will have 4G capability.

The United States’ leadership in the ongoing development of mobile broadband, devices, and content applications is the result of many economic and institutional factors. However, it should not go unnoticed that a light-touch regulatory environment has helped entrepreneurs spur investment in new products and services through the process of “permissionless innovation.” As laptops, tablets, phablets, and smartphones have morphed into each other and become substitutes, competition among them has increased, reducing the price and increasing the quantity demanded by consumers. This increase in consumer demand has created more innovation in mobile services, more broadband network expansion, and more application accessibility.

Additionally, because video currently comprises 55 percent of mobile data, strong intellectual property rights have also played a pivotal role, allowing for a growing number of brands in mobile devices and new video content. It is important for artists, innovators, and service providers to have secure copyrights and patent rights in order to incentivize returns on creation and investment. The prospect of profitable returns invites new entrants into the market, which ultimately leads to more investment and lower prices for consumers.

Cisco’s report provides very important information for policymakers. It is essential that the FCC not take for granted the way in which the development and deployment of mobile networks and technologies has benefited consumers. More licensed and unlicensed spectrum is needed to meet the growing consumer demand for advanced services and devices. Understanding the extent of mobile data growth and the resulting need for additional spectrum will be crucial for promoting future U.S. leadership in mobile broadband – as will be the need for the government to avoid imposing burdensome regulatory requirements in a market which is indisputably competitive.

  

Cisco’s report provides very important information for policymakers. It is essential that the FCC not take for granted the way in which the development and deployment of mobile networks and technologies has benefited consumers. More licensed and unlicensed spectrum is needed to meet the growing consumer demand for advanced services and devices. Understanding the extent of mobile data growth and the resulting need for additional spectrum will be crucial for promoting future U.S. leadership in mobile broadband – as will be the need for the government to avoid imposing burdensome regulatory requirements in a market which is indisputably competitive.

New Cisco Report Projects Huge Increases in Mobile Traffic and Connections

On February 3, Cisco released its annual Visual Network Index (VNI) Forecast Report: Mobile Data Traffic Update, 2014-2019. Although there are several key findings that were made clear by the Vice President of Global Technology Policy Dr. Robert Pepper and the Vice President of Service Provider Marketing Doug Webster, who presented the report, I certainly recommend exploring the global, regional, and national findings on Cisco’s helpful interactive website. (See FSF blog on last year’s report here.)

Video applications are by far the biggest driving force behind the increases in mobile traffic for the past several years and will continue to be for the next five years as connections increase and networks expand. On a global level, video is projected to comprise 72 percent of mobile data in 2019, an increase of 17 percentage points from 2014 (55 percent). While the United States has certainly been a leader in the growth of mobile connections and traffic, the report projects the rest of the world will have tremendous growth over the next five years. 

Some key finding regarding the growth of mobile connections and traffic throughout the world:

• Almost half a billion (497 million) mobile devices and connections were added in 2014.
• Mobile network (cellular) connection speeds grew 20 percent in 2014.
• Average smartphone usage grew 45 percent in 2014.
• Global mobile data traffic will increase nearly tenfold between 2014 and 2019.
• By 2019, 4G will be 26 percent of connections, but 68 percent of total traffic.
• The average smartphone will generate 4.0 GB of traffic per month by 2019, a fivefold increase over the 2014 average of 819 MB per month.

As you can see from the two graphs below, the global growth of mobile traffic and devices is projected to be enormous over the next five years.

Cisco Forecasts 24.3 Exabytes per Month of Mobile Data Traffic by 2019

One of the many innovations in broadband technologies and applications is the ability to compress data for high bandwidth applications. This innovative tool expands the consumer base of applications by allowing users to get the same great experience while using less data, ultimately making less advanced networks more useful. Embedded within the methodology of the Cisco report is a 7 percent compression rate over each year of the projection. This speaks volumes to the projected growth in mobile traffic if we also expect applications to get smaller overtime (all else equal).

Global Mobile Devices and Connections Growth

Here are some of the key findings for the United States:

• 40.7 million smartphones were added to the mobile network in 2014.
• Mobile data traffic will grow 7-fold from 2014 to 2019.
• Mobile traffic per user will reach 11,510 megabytes per month by 2019, up from 1,960 megabytes per month in 2014, a compound annual growth rate of 41%.
• There will be 290.1 million (86% of the United States' population) mobile users by 2019, up from 268.5 million in 2014, a compound annual growth rate of 1.6%.
• Mobile data traffic in 2014 was equivalent to 32x the volume of U.S. mobile traffic five years earlier (in 2009).

North America, and predominately the United States, has been a global leader in the development of mobile broadband. North America had 39.1 percent of all global 4G connections in 2014 and that percentage is projected to increase to 42.4 percent by 2019.

The United States’ leadership in the ongoing development of mobile broadband, devices, and content applications is the result of many economic and institutional factors. However, it should not go unnoticed that a light-touch regulatory environment has helped entrepreneurs spur investment in new products and services through the process of “permissionless innovation.” As laptops, tablets, phablets, and smartphones have morphed into each other and become substitutes, competition between them has increased, reducing the price and increasing the quantity demanded by consumers. This increase in consumer demand has created more network development, expansion, and application accessibility.

Additionally, because video currently comprises 55 percent of mobile data, strong intellectual property rights have also played a pivotal role, allowing for a growing number of brands in mobile devices and new video content. It is important for artists, innovators, and service providers to have secure copyrights and patent rights in order to incentivize returns on creation and investment. The prospect of profitable returns invites new entrants into the market, which ultimately leads to more investment and lower prices for consumers.

This report provides very important information for policymakers. It is essential that the FCC not take for granted the way in which the development and deployment of mobile networks and technologies has benefited consumers. As the report recommends, more licensed and unlicensed spectrum is needed to help meet the constantly growing consumer demand for advanced services and devices. Understanding of the extent of mobile data growth and the resulting need for additional spectrum will be crucial for promoting future U.S. leadership in mobile broadband – as will be the need for the government to avoid imposing burdensome regulatory requirements in a market which is indisputably competitive.

Cisco’s Annual Data Report Highlights the Importance of Sound Spectrum Policy

On February 5, Cisco released its Global Data Traffic Forecast Update, 2013 - 2018. These reports, undertaken by Cisco annually, have proven to be valuable tools for understanding and forecasting shifts in data traffic.

This year’s report shows impressive growth in the adoption, usage, and number of mobile devices worldwide. But each of these metrics varied dramatically by region. North America led the world in nearly all categories of growth, including traffic, data usage, and “smart” device adoption.

While such leadership is evidence of a strong digital economy, it also highlights the growing demand for spectrum. And this continually growing spectrum demand emphasizes the importance of sound spectrum policy decisions by the FCC to ensure positive trends like those reported by Cisco continue.

According to Cisco, global mobile data traffic increased by 81 percent in 2013, rebounding from a slowed rate of growth in 2012. In 2013, global mobile data traffic reached 1.5 exabytes per month, increasing from 820 petabytes per month at the end of 2012. This traffic is nearly 18 times the traffic of the entire global Internet in 2000. Emerging market regions like the Middle east and Africa all doubled mobile data traffic in 2013. Mobile data traffic in more mature markets like North America and the Asia Pacific region grew by 77 and 86 percent respectively.

Cisco projects that global mobile data traffic will grow nearly 11-fold between 2013 and 2018, increasing to 15.9 exabytes per month by 2018, as the chart from Cisco’s report shows below.

In North America, consumers utilize more data than the rest of the world, averaging 1.38 GB per month in 2013, compared to just 185 MB in the Middle East and Africa. This trend is only expected to continue, as North America is a region that is projected to have the fastest growth in connections to mobile devices that access mobile networks. The North America and the Asia Pacific regions will account for nearly two-thirds of global mobile traffic by 2018. 

The report finds that the increasing number of wireless devices is one of the primary contributors to global data growth. Cisco projects that by the end of 2014 there will be more mobile-connected devices than people in the world. Consumers added over half a billion mobile devices and connections in 2013, making the global device and connection total 7 billion in 2013. As noted above, North America leads growth in this metric too, with the region projected to increase in mobile device connections at a 12 percent compounded annual growth rate.

Globally, mobile devices and connections are projected to grow to 10.2 billion by 2018. This will be comprised of approximately 8.2 billion personal mobile devices, and 2 billion machine-to-machine (M2M) connections. Over half of all devices connected to the mobile network will be “smart” by 2018, as the chart below shows. “Smart” devices have advanced computing and multimedia capabilities and a minimum of 3G connectivity. Again, North America is projected to lead growth in this area, with its regional share of smart devices and connections increasing from 65 to over 90 percent between 2013 and 2018.  Western and Central Europe fall second and third, with projected regional share of smart devices reaching 83 and 61 percent of total devices, respectively.

Cisco reports that the transition to smart devices is accompanied by an evolution to higher-generation connectivity. This fuels rapid production and adoption of advanced multimedia applications, and contributes to increased mobile and Wi-Fi traffic. By 2018, mobile video is projected to generate over 69 percent of mobile traffic by 2018, contributing to the 90 percent of total mobile data traffic accounted for by all cloud applications which include streaming audio, online gaming, social networking, web browsing and online storage.

In turn, the need for efficient bandwidth and network management drives 4G deployment and adoption worldwide. Japan and Korea are predicted to lead 4G deployment; Cisco estimates that 56 percent of Japan’s connections will be 4G by 2018, and 54 percent of Korea’s. North America is projected to have 51 percent of its mobile devices and connections with 4G capability by 2018, but it is expected to lead the world in its share of total global 4G connections.

Additionally, the marked growth of machine-to-machine (M2M) connections and wearable devices will also continue to drive mobile data traffic growth. Over the next five years, Cisco projects M2M and wearable connections will grow from 341 million to over 2 billion, and those will transition from predominantly 2G (71 percent) today toward 3G (51 percent) and 4G (14 percent) by 2018, as the chart below shows. For wearables, Cisco estimates that the number of devices will grow 8-fold by 2018, increasing from 22 to 177 million. Traffic from these devices is projected to grow an amazing 36-fold between 2013 and 2018, reaching 61 petabytes a month. Again, North America currently leads the world in this category, with 42 percent of the global share of wearables. North America is also slated to lead growth in this area, despite experiencing a decrease in relative share over the next five years as other regions adopt wearable device technology.  

The global growth in mobile connections, devices, and traffic, and the evolution and emergence of new technologies over the past year exemplify the strength and vitality of the digital economy worldwide. Cisco’s valuable work tracking these metrics provides a crucial resource that informs the decisions of carriers, vendors, innovators, investors, and policymakers alike. 

Clearly, Cisco’s latest report shows that North America leads the world in many growth categories. Although it is important to acknowledge this progress, it is imperative that policy-makers consider the implications of these findings. The report provides evidence of the exponential growth in data traffic, devices, applications, adoption of smart devices, and the accompanying demand for more spectrum. The North American region has by far the highest data use per month in the world, and the fastest growing number of devices with advanced computing and multimedia capabilities. Given Cisco’s projections, making more licensed and unlicensed spectrum available will be increasingly necessary.

The FCC has an important role to play in ensuring the continued growth and development of the mobile market. It is essential that the Commission not take for granted the way in which this progress has benefited consumers and fueled the development and deployment of new networks and technologies. Making more spectrum available for licensed and Wi-Fi offerings will help meet the constantly growing consumer demand for advanced services and devices demonstrated throughout Cisco’s report.

Successfully executing the upcoming incentive auction and framing forward-thinking broadband policy that reflects the robust and rapidly changing digital economy will be challenging. But approaching these proceedings with an understanding of the extent of mobile data growth and the resulting need for additional spectrum will be crucial to promoting future U.S. leadership in mobile broadband.

Cisco’s report is a valuable resource for all, and especially for communications policymakers.  

Cisco, FCC Reports Demonstrate Continued Broadband Progress

On February 6, Cisco released its Global Mobile Data Traffic Forecast Update, 2012 - 2017. This year the release of the report seems to have received less attention than in previous years. However, the report deserves just as much, if not more, attention as previous reports, especially in light of the tremendous growth it indicates with respect to mobile broadband subscribers and data usage over the past year.

The progress report documents the remarkable success of a marketplace where rapid innovation is both fueled by, and then rewarded with, swift consumer adoption of innovative new products.

According to Cisco’s latest Visual Networking Index, the number of mobile users will grow from 4.3 billion to 5.2 billion mobile users and more than 10 billion mobile connections, 45 percent of which will be through 4G networks, connected at speeds seven times faster than the current average.

Correspondingly, global mobile data traffic will grow 13-fold by 2017 to a rate of 11.2 exabytes consumed globally per month, totaling 134 exabytes annually. The 2012 monthly rate was 0.9 exabytes of mobile data traffic; still, this was nearly double the data usage average in 2011.

In each month of 2012, the average mobile consumer used data for one hour of video, two hours of audio, at least one video call, and one downloaded app per month. By 2017, each month consumers will use 2 gigabytes of data, including 10 hours of video and 15 hours of audio, 5 video calls, and 15 app downloads. In other words, during each month of 2017, mobile users are expected to view 30 trillion images, 10 a day for each person on Earth, or 3 trillion video clips, one video clip per day per person on Earth.

This projection means that Cisco estimates consumers will be using 46 times the total amount of mobile IP traffic in 2017 than they were in 2010, and specifically using 40 times the data across just high-speed 4G networks.

North American consumers currently use by far the most data per month: 752 megabytes compared to 491 in the next closest global region, Western Europe. In 2017, North Americans are projected to continue leading mobile data usage, averaging 6,171 MB, compared to 3,343 MB in Western Europe.

The FCC also recently released its Internet Access Services report, which provides data on Internet access connections through December 31, 2011, for the United States. Notable developments in the report include growth across all Internet connections; the number of connections over 200 kbps in at least one direction increased by 27% to 230 million. Mobile Internet subscriptions saw particularly large growth, with mobile subscriptions increasing to 142 million – a 46% increase from December 2010. Both fixed and mobile services shifted to higher speeds, with particularly notable growth in high-speed wireless broadband: the share of mobile wireless subscriptions with download speeds at or above 3 mbps increased from 11% to 22%.

For this exponential increase in traffic, Cisco credits laptops, but also the proliferation and rapid adoption of mobile devices like smartphones and tablets, which will drive 93 percent of global mobile traffic by 2017, as well as the use of multiple connected devices by single users. Today 45% of American adults own smartphones, 31% of American adults own a tablet computer, and more than 57% own a laptop.

Clearly, the rapid rise of mobile broadband is giving consumers another attractive option for connecting to the Internet. Because of the proliferation of wireless connections, the Pew Research Center reports that groups that have traditionally been on the other side of the digital divide are going online faster. The Internet access gap that is closing most rapidly is that between whites and minorities. Having broadband strongly affects how one uses the Internet. The Pew report called this the “mobile difference,” finding that “once someone has a wireless device she becomes much more active in how she uses the Internet . . . [and is more likely] to go online not just to find information but to share what they find and even create new content,” and become a participant in today’s digital dialogue.

As the Cisco and FCC reports make clear, exponential increases in high-speed mobile connections and usage occurred last year and are projected to continue at the same or greater rates through 2017. We should not take for granted the incredible progress made and the way in which this progress has empowered consumers by virtue of another means of Internet access.

This impressive progress should be allowed to continue unhindered by unnecessary regulations or other government mandates that ultimately increase costs that are passed along to the consumer.